Harringay, Haringey - So Good they Spelt it Twice!
Amazon and Tax Avoidance
Amazon sells us books, CDs/DVDs and a vast range of other goods at rock-bottom prices.
Book and record sellers have told me they can’t compete on price. Amazon’s buying power means they get deep discounts from publishers. Which independent shops can’t match. So independents are finding creative and imaginative ways to compete on service – with advice and newsletters; plus the power of personal contacts, special events, book launches and other methods. (You can see this at our local Big Green Bookshop. Events and Diary section on their website.)
But I didn't know how Amazon organises its distribution - completely legally - to avoid taxes. The result is what on 6 April Tim Waterstone called “grotesquely unfair avoidance of millions of pounds of UK taxes [which] could lead to the death of high street bookshops”. This followed a Guardian report on 4 April that with £7 billion sales in Britain Amazon pays no U.K. Corporation Tax.
Is it down to the Government to take action? Or should we as consumers be telling companies that sell us goods that we want them to pay their fair share of taxes? Just as we are starting to tell our politicians, senior civil servants and local council consultants.
(Tottenham Hale ward councillor)
Tags for Forum Posts: Amazon, Corporation Tax, UK Uncut, all in this together, booksellers
Replies to This Discussion
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Permalink Reply by Alan Stanton on
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I'm really curious, John. In your view, are there no disadvantages at all? Is Tim Waterstone completely wrong?
Or how about this less critical view from New Orleans? Not specifically about Amazon but suggesting advantages when thriving independent local businesses and good old-fashioned capitalism enable the cash - and social capital - to circulate.
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Permalink Reply by John D on
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Of course there are diadvantages, in the same way that smaller shops close in the face of competition from Sainsbury's et al.
But part of my pension is paid from Canada and, as such, benefits from a 10% discount on my income tax.
This is legal - but are you suggesting that I should voluntarily pay the remaining 10% ? Not going to happen
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Permalink Reply by Michael Anderson on
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Surely, one of the outcomes of tax avoidance, and being able to sell more cheaply, is that the competition can't compete, goes out of business and you end up with a monopoly. I thought that "choice" was what this government was supposed to be about?
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Permalink Reply by Isabelle on
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Would big companies paying more taxes help the smaller high street (book)shops to survive? Just because their buying powers would be crushed a little?
To answer your last question, I'm totally in favour of local independent shops, but if their survival makes sense to the long-term economy (and to our well-being) I think that the government should take action rather than rely on consumer to run a side campaign (although it's a nice idea and not impossible). Isn't this why the government gets paid for - administrate the country in our best interest? Though, as I said above, I don't know if raising more taxes would actually achieve that...
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Permalink Reply by StephenBln on
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Forget it Alan..
those whose only argument is 'if it's legal - it's OK' are the same troop who continually whinge about legal establishments such as betting shops and the rest..
http://en.wikipedia.org/wiki/Fixed_Book_Price_Agreement
Those of us who live more culturally aware countries certainly have to pay more for books.. but can sleep well in our beds, in the knowledge that authors, artists etc., are not being shafted by large organisations..
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@Stephen:
I don't believe I have ever whinged about betting shops. I did once, a while ago, point out that lap-dancing clubs, while perhaps undesirable, are legal.
My take on betting shops etc is that if people didn't want to spend their money in them, they would go out of business and it's not up to me to tell people how to waste their money.
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Permalink Reply by Maddy on
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I'm boycotting them - and LoveFilm which is part of Amazon. I agree that it's the government who should be acting in this (and other massive tax-avoidance) cases, but given the current big business-friendly political climate I can't see that happening. So I'm going elsewhere, and in fact have done so for a while. It's clear from credit card receipts that Amazon is based in Luxembourg - I'm surprised it's taken so long for people to notice.
Apart from actual bookshops there's also the Book Depository, an online store registered in Gloucester, so presumably liable for UK corporation tax.
Little bit rich of Tim Waterstone to complain, as he was partly responsible for the demist of many independent bookstores with his ruthless price-cutting policies.
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Well, it seems that Amazon is a company based in Luxembourg, not the UK, and thus wouldn't be expected to pay UK corporation tax. One of the downsides of Internet trading, perhaps.
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Permalink Reply by Clive Carter on
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I think the tax issue is just one instance of the mismatch between local jurisdictions and the way international business works. If paid Amazon paid more tax, they would still be highly competitive with the fixed bricks and mortar operations on the High Street.
If Amazon were compelled to pay more tax, it might tend to increase their prices. I understand they may make most of their money on the fixed prices for postage (which can easily exceed the value of the purchase).
If it wasn't Amazon offering better value via the Internet, it would be someone else.
Remember the Net Book Agreement? At one time, there were those who advocated that anti-competitive measure - another thing that favoured producers over consumers.
Amazon offer a terrific service of low prices and wide choice - that benefits everyone. Everyone, except the special pleading of Mr Waterstone. Having said that, I think that Amazon probably pay too little tax in a country in which they do so much business.
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